Prime Minister Andy Burnham has unveiled a plan to reduce household electricity costs by eliminating the 5% VAT. This initiative, aimed at addressing the ongoing cost of living crisis, is scheduled to take effect on 1 October and is expected to save the average family approximately £45 annually.
The policy will be financed by terminating the £1.8bn digital ID programme, a move officials project will cost £850m during the current financial year. Chancellor John Healey stated that the measure is intended to provide comfort to citizens throughout the winter months.
This announcement follows Burnham’s recent appointment as the UK’s seventh prime minister since 2016. In his new role, Healey replaces former chancellor Rachel Reeves. The newly formed cabinet is scheduled for its inaugural meeting on Tuesday.
